The East India Companies 1600-1800

The East India Companies Why did Europeans start organising trade to Asia in Companies? What companies existed over time and why were they successful before going into decline? What goods did companies trade in and how did trade evolve over time? What role did Asia play in the trade of the Europeans?

Before the Companies Caravan route Portuguese Cape of Good Hope Crown monopoly

What were the companies looking for? Spices/high value small volume Luxury goods

What did Companies need from Europe Monopolies/ an assured market for their goods

Monopolies Charter form their respective monarch or Parliament giving them the right to sell a certain product in their respective country, in this case being the sale of all goods from the trade from the area between the Cape of Good Hope and Cape Horn.

What did the Europeans need in Europe Monopolies Capital / an assured market for their goods

Limitations in Asia Europeans never in production, always the traders in Asian middleman, necessary to obtain goods Deals with indigenous rulers During the 18th century, mostly at the end we see a development of Europeans towards production, industrial revolution in Europe and the organisation of European plantations in Asia

European Companies Dutch East India Company (VOC) English East India Company (EIC) French East India Company (CIO) Danish East India Company Swedish East India Company Ostende East India Company Prussian East India Company

Companies Dutch East India Company (Vereenigde Oost-Indische Compagnie, VOC) 1602-1796 Combining 6 different pre-companies by the state

Companies Dutch East India Company (Vereenigde Oost-Indische Compagnie, VOC) 1602-1796 Combining 6 different pre-companies by the state First joint-stock company with Capital, Shareholders and Stock market (Amsterdam)

Companies Dutch East India Company (Vereenigde Oost-Indische Compagnie, VOC) 1602-1796 Combining 6 different pre-companies by the state First joint-stock company with Capital, Shareholders and Stock market (Amsterdam) Debts incurred during the fourth Anglo-Dutch war (1780-1784) and the wars after 1796 meant bankruptcy as the state stepped in to take over.

Companies English East India Company (EIC) 1600-1858 Chartered again in 1650, then chartered with amalgamation of the Old and New EICs in 1709 Developed into modern form of joint-stock company in the last quarter of 17th century

Companies English East India Company (EIC) 1600-1858 Plassey (1757) meant the slow transformation from company towards government After 1813 the EIC was only left with a monopoly on the China trade, became more focussed on the government of India

Companies Compagnie des Indes Orientales (1664-1761) Formed by Colbert Went through different forms, not very stable and influenced by politics Politically was the rival of the EIC in the 18th century, but after initial success lost out

Companies Dansk Østindisk Kompagni (1616-1729) First Charter 1616-1650 Second Charter 1670-1720 Asiatik Kompagni First Charter 1730-1772 Second Charter 1772-1807 (only monopoly on China Trade)

Companies Ostende Company (1715-1727) Dissolved because of political pressure of the English and Dutch on the Habsburg Emperor Swedish Company (1731-1806) First Charter (1731-1746) Second Charter (1746-1766) Third Charter (1766-1786) Fourth Charter (1786-1806)

Profitability The English and Dutch East India companies were the most diversified companies and were profitable and successful over a long period (both almost for 2 centuries) The French Company was mostly a vehicle of French political designs with only modest success in Asia both in trade and in politics The Danish, Swedish, Ostend and Prussian companies were small specialised and very profitable companies, but volatile to political pressure and change and thus had only short periods of success

Luxury Goods Spices (17th century) New products (18th century)

Spices (17th century) Pepper Nutmeg and mace Cloves Cinnamon

Pepper

Nutmeg and mace

Cloves

Cinnamon

Profits (17th century) All Companies struggling Except the VOC, which is highly profitable Between 1630-1670, annual profits of 2 million guilders – profits 18 of annual revenues- 6% annual return on invested capital

New products (18th Century) Tea Coffee Textiles Procelain

Thee

Porcelain

Coffee

Textiles

Profits (18th Century) The Dutch East India Company is less profitable as it has to compete with the other companies for the new goods while its more financially and geographically rooted in the spice trade The other Companies become profitable as they specialise in upcoming products, although competition is hard

Financing trade Export of Silver

Export of Silver Table 1 Average annual value of treasure exported by the English and the Dutch east India Companies to Asia, 1601-1794 (in million florins rounded off to the nearest thousand; £1=f.12= Rs 8)   Years English East India Company Dutch East India Company 1601-10 0.143 0.651 1611-20 0.588 1.019 1621-30 0.484 1.236 1631-40 0.452 0.850 1641-50 n/a 0.920 1651-60 n/a 0.840 1661-70 1.073 1.210 1671-80 3.053 1.129 1681-90 4.058 1.972 1691-1700 2.561 2.860 1701-1710 4.276 3.927 1711-20 4.970 3.883 1721-30 6.513 6.603 1731-40 5.914 4.012 1741-50 7.236 3.827 1751-60 7.782 5.896 1761-70 n/a 5.354 1771-80 n/a 4.832 1781-90 n/a 4.790 1790-94 n/a 4.243 Source: Om Prakash, ‘Precious-metal flows in India, Early Modern Period’, in: Dennis Flynn, Arturo Giraldez and Richard von Glahn, Global Connections and Monetary History, 1470-1800 (Aldershot 2003), 152, table 6.1.

Export of Silver (EIC) Figure 1. East India Company exports of silver, 1760-1833 Source: H.V. Bowen, the business of Empire: The East India Company and Imperial Britain, 1756-1833 (Cambridge 2006), 225, figure 8.1.

Export of Silver (VOC)

Financing trade Export of Silver Intra-Asian trade

Intra-Asian trade Limiting exports of silver: Profit from intra-Asian trade Asian products better barter than silver

English Private trade

Organising Intra-Asian trade Monopoly Private trade Asian traders: Chinese to Batavia

Financing trade Export of Silver Intra-Asian trade Money transfers

Money transfers

Financing trade Export of Silver Intra-Asian trade Money transfers Colonisation

Colonisation VOC (17th Cen): conquest of the spice islands EIC (18th Cen): conquest of India

Colonisation Trading posts Political Influence Conquest

Colonial expansion Income from taxation Control over trade

The Decline of the Companies Costs were rising, both commercial and political costs and surpassed the means of companies The Napoleonic wars cut all European countries off from Asia and made them go bankrupt As trade was replaced by government, a company seemed unfit to govern Industrial revolution made most colonies suppliers of raw materials in stead of producers of luxury goods

Conclusions